8:00 am, April 28, 2023
Exports helped push March’s car production figures up by more than six per cent to 81,605 vehicles year on year, figures released today by the SMMT show.
With the global shortage of semiconductors and other components also beginning to ease, it rounded off a three months that saw car manufacturing in the UK rise by six per cent to 219,887 units.
The industry body said factories produced 12,540 units more than in 2022’s first quarter, with exports increasing by 6.6 per cent and equating to almost eight in 10 of the cars that were made.
March’s volumes were up by 6.1 per cent, and of the month’s 81,605 total, exports comprised 61,546 units – up 10.4 per cent and offsetting a 5.1 per cent decline in car production for the domestic market, with just 20,059 cars made for the UK.
The EU took the largest share of exported cars at 39,172 units – 63.6 per cent – with shipments rising by 4.9 per cent.
However, exports to the next biggest markets – the US and China – fell by 4.1 per cent and 8.3 per cent respectively.
Exports to Turkey, Japan, Australia and South Korea all increased, though. Combined, they represented 11.9 per cent of all cars heading abroad in March.
Combined volumes of the latest hybrid, plug-in hybrid and battery-electric vehicles models surged by 75 per cent last month to 32,546 units.
The SMMT said four in 10 cars built during March featured ultra-low or zero-emission powertrain technology.
It added that this trend is set to continue as new products come on stream, with more than 20 models of electric cars, vans, buses, trucks and taxis expected to be in production in the UK by 2025.
SMMT chief executive Mike Hawes said: ‘A second consecutive month of growth for UK car production gives cause for optimism, though volumes are still well below pre-pandemic levels.
‘If British car manufacturing is to get back towards those levels, with all the economic benefits that brings, we need to match the best in global competitiveness.
‘That means driving down the high cost of UK energy, reforming business rates and vigorously promoting Britain globally to secure the investments essential to a zero-carbon automotive future.’
The SMMT’s West Midlands regional forum will be meeting at the British Motor Museum on Thursday, May 4 with companies from across the region discussing how the UK sector can scale up electrified vehicle and component production.
The event will also feature speakers from Jaguar Land Rover and Aston Martin.
What the industry says
Positive signs of growth
Whilst production levels continue to lag behind pre-pandemic rates, the numbers indicate positive signs of growth and fuel optimism for the rest of the year.
As the UK economy and manufacturing industry recovers and stabilises, the long-term focus of manufacturers will need to be the market’s transition towards alternative fuel vehicles (AFVs).
Although further support and incentives would be welcomed, the government’s progression of the zero-emissions mandate is a step in the right direction for AFV producers.
As production issues begin to ease, we should see a steady increase in figures throughout the year.
Lisa Watson, director of sales, Close Brothers Motor Finance
Government needs to be more proactive
Although the UK’s automotive sector is recovering, we have some way to go to reach pre-pandemic levels of production.
This is unlikely to happen unless more investment is made in domestic electric vehicle production and battery manufacturing, which is particularly prescient given that there are now over a million EVs on our roads.
The latest evidence from abroad shows manufacturers are responding directly to government support, with the likes of VW considering moving their battery manufacturing facilities from Europe to the US in light of recent US government subsidies.
For the UK, which supports hundreds of thousands of jobs, to remain competitive, the government needs to take a more proactive stance.
Steve Huntingford, editor, What Car?
Big questions are still unanswered
Driven by increased demand for hybrid and electric vehicles, and a gradual easing of component shortages that have impacted recent years, UK car production saw pleasing growth in the first quarter of 2023.
But despite this upturn in production, overall volumes of vehicles produced remain lower than before the pandemic.
Whilst it’s good news that production levels are again increasing, big questions remain unanswered about how the UK will produce electric vehicles at much larger scale and what the nation’s strategy is to ensure that its car industry can compete with countries who have already developed bold policy moves to encourage inward investment in next-generation manufacturing facilities.
Richard Peberdy, UK head of automotive, KPMG
